The large-scale development project, designed to turn two islands inside the Incheon free economic zone into a world-class leisure hub, is expected to cost 317 trillion won ($288 billion) and take about 20 years to complete.Over the years, I have heard many tales by politicians in Korea. These politicians wave MOUs as a clear sign of success. Success should be claimed, only, when projects are funded. I would love to see this occur, but from whom and how the heck is Incheon going to raise USD 280 billion. Think about this, the total value of all the property in Manhattan, in 2006, was USD 802.4 billion according to the NY City government. Commercial property is, only, c. USD180 billion of this number.
Incheon city unveiled a blueprint for the envisioned leisure complex, dubbed ``8City,’’ at the Shilla Hotel in downtown Seoul, Wednesday. In November 2006, Incheon signed a memorandum of understanding with international hotel chain Kempinski Group headquartered in Geneva to initiate the project.
Under the plan, the 8City will span 80 square-kilometers, three times larger than Macao. It will be shaped like number 8, considered lucky by Chinese.
There will be convention centers, marinas, casinos, car race tracks, theme parks, residential villas, hotels, shopping malls, golf courses, hospitals and many other facilities needed for leisure and residential life.
To undertake the scheme, Incheon city has set up a special purpose company named 8City.
``When the country’s grandest construction project is completed in 2030, more than 350,000 people will reside in 8City. It will attract about 134 million tourists annually, providing jobs for over 930,000,’’ an Incheon city official said. ``The scheme will create hundreds of thousands of new decent jobs in the services sector and provide a vibrant boost to the local economy.’’
The official said in addition to the establishment of the Green Climate Fund in nearby Songdo, Incheon will become a comprehensive leisure and business center in Northeast Asia.
The 8City will be built near Youngjong Island, where Incheon International Airport is currently located. Thanks to its proximity to the airport, the envisioned complex is widely expected to draw a large number of tourists from China, Japan and other Asian nations.
Additionally, it is close to Seoul and its adjacent areas where more than 25 million Koreans reside.
Under the plan, Incheon will begin the first phase of the development in the first half of 2013 by purchasing land from those residing on the two islands and reclaiming land from the sea surrounding them. It then plans to build theme parks, hotels, convention centers and other leisure-related facilities through 2020.
Kempinski Group has pledged to raise a total of 3.8 trillion won from sovereign wealth funds to implement the first-stage of the construction process.
From 2021 to 2030, a variety of urban infrastructure will be constructed to turn the 8City into a comprehensive leisure and business center.
Incheon has also signed a contract with Korea Investment & Securities to raise trillions of won over the coming years to secure land and finance the construction projects.
In June, it signed an investment agreement with Sanbar Development Corp., which pledged to invest up to $1 billion into the 8City project.
Sean Hayes may be contacted at: SeanHayes@ipglegal.com.
Sean Hayes is co-chair of the Korea Practice Team for an international law firm. He is the only non-Korean to have worked as an attorney for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty.